Next week Meg Whitman will be meeting with analysts to discuss HP’s planned turnaround.But Jefferies analyst Peter Misek jumped the gun with a report yesterday that not only advised investors to sell HP’s stock, but warned that HP could be heading for another huge write-off, to the tune of $3 billion, reports the Silicon Valley Business Journal.
Misek estimates that HP’s stock will hit $14 a share in the next 12 months. It’s been trading near $17 recently. Other analysts, on average, think HP will recover to $24. Misek isn’t the only bear. Earlier last month, UBS Analyst Steven Milunovich also recommended that investors sell the stock.
But Misek takes it a step further. He’s predicting that HP could announce an additional $3 billion write-off related to last year’s $11.7 billion purchase Autonomy.
Last month, HP wrote down $8 billion, due to a goodwill impairment on its $13.9 billion EDS acquisition
Autonomy has been an Albatross around Whitman’s neck. In May, Whitman told investors that sales of Autonomy were “disappointing” and that the former Autonomy CEO Mike Lynch was out the door.
UPDATED: Although HP hired a well-known software guy, George Kadifa, in May, to run HP’s software business, Autonomy wasn’t part of his job. Earlier this month, Microsoft’s North American President Robert Youngjohns was hired run Autonomy.
HP doesn’t separately report Autonomy’s financial results, but on its last earnings statement, it said that HP’s Software unit includes $14.6 billion of goodwill, of which $6.9 billion relates to Autonomy.
Software accounted for $2.9 billion in net revenue for the nine months ending July 31, a lot less than the company’s other business units like the Personal Systems Group ($27 billion), the Imaging and Printer Group ($18.4 billion), the Services Group ($26.2 billion) and the enterprise hardware group ($15.3 billion).
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